Kathmandu. Nepal Rastra Bank (NRB) is banking on the fiscal year 2083. The monetary policy announced for the year 84 has been widely criticized for failing to address the serious problems seen in the country’s current economy. The policy, which comes amidst a paradoxical situation where money is piled up in the financial system but not circulating in the market, has failed to overcome the frustration prevailing in the private sector, stock market and real estate. <\/p>\n
The central bank seems to be continuing the old policies and focusing only on a few technical issues. As a result, a concrete roadmap has not been found to remove the sluggishness of the economy. <\/p>\n
The Monetary Policy has set the target of extending credit to the private sector to 11 percent for the coming fiscal year. While this goal sounds promising, past experience has cast doubt on it. The monetary policy is silent on how to meet the current target of 11 percent in the backdrop of hardly half of the credit flow in recent years. <\/p>\n
Even though the banks have enough liquidity to lend money, they are not in a position to invest due to the pressure on the capital fund. Setting targets only on numbers without addressing such a fundamental problem seems to ignore the real ground of the economy. <\/p>\n
Experts say the monetary policy is more focused on protecting one’s jurisdiction than on solving the economy’s existing problems. The government has set a target of 7 percent economic growth. However, monetary policy lacks the kind of flexibility and motivation it should have provided to achieve this goal. <\/p>\n
Although the NRB has divided its report into different sections, it has not been able to excite the stakeholders. The lack of coordination between the monetary policy and the government’s fiscal policy has increased the risk of accumulation of money in the state coffers on the one hand and cash flow crisis in the market on the other. <\/p>\n
Some of the positive aspects include removing unlimited liability arising out of personal guarantees and simplifying the provision of blacklisting due to dishonour of cheques. Since a large proportion of blacklisted cheques are dishonoured, the reforms could provide some relief to small businesses. <\/p>\n
Similarly, the issue of interest waiver and loan restructuring procedures for the revival of sick industries has raised some hopes, but its successful implementation still remains doubtful. Both banks and borrowers are confused as there is no clarity on the process of reviving loans based on stress. <\/p>\n
The policy did not bring any special concessions to the stock market and the real estate sector. Although it is said that the debt limit will be fixed on the basis of the strength of the company, it does not seem to play a big role in uplifting the deteriorating psychology of the market. <\/p>\n
There has been no concrete policy change to address the slowdown in the real estate business. Although the target is to keep inflation within 5.5 percent, the expansion in external supply and domestic demand is sure to make it challenging. <\/p>\n
On Wednesday, the stock market was not buoyed by monetary policy. The Nepal Stock Exchange (NEPSE) index decreased by 30.09 points in the first trading day after the monetary policy was issued. It is said that the central bank has not met the expectations of investors. <\/p>\n
Stock market experts also complain that the monetary policy has not been found even though it is seeking an easy system. <\/p>\n
Now everyone’s attention is on the circulars issued by the Rastra Bank after the monetary policy. Experts say that the policy should be brought to support the banks and financial institutions and the capital market as well.<\/p>\n","protected":false},"excerpt":{"rendered":"
Kathmandu. Nepal Rastra Bank (NRB) is banking on the fiscal year 2083. The monetary policy announced for the year 84 has been widely criticized for failing to address the serious problems seen in the country’s current economy. The policy, which comes amidst a paradoxical situation where money is piled up in the financial system but […]<\/p>\n","protected":false},"author":16,"featured_media":219859,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[45117,45031,45159],"tags":[],"class_list":["post-306206","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bank-finance-en","category-banner-news-en","category-news-en"],"acf":[],"_links":{"self":[{"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/306206","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/users\/16"}],"replies":[{"embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/comments?post=306206"}],"version-history":[{"count":1,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/306206\/revisions"}],"predecessor-version":[{"id":306207,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/306206\/revisions\/306207"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/media\/219859"}],"wp:attachment":[{"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/media?parent=306206"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/categories?post=306206"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/tags?post=306206"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}